BERLIN • The City Hostel Berlin operates out of a large, anonymous building in what was communist East Berlin, but it is a short walk from Checkpoint Charlie and other attractions and has become a popular place to stay, with good ratings on TripAdvisor and Yelp.
The only tip-off that this hostel differs from others in a city long a magnet for the world's youth is the embassy next door, where North Korea's flag flaps from a pole near a poorly tended garden and that country's ruling family, the Kims, is enshrined in a photo display on a grey metal fence.
The hostel, formerly diplomatic quarters, has been earning Pyongyang tens of thousands of euros a month for the past decade, but it will soon be closed to comply with UN sanctions imposed over North Korea's nuclear tests.
Germany on Wednesday confirmed it was acting "as swiftly as possible" to cut off the currency flow after domestic media reported that North Korea was charging an unnamed German businessman €38,000 (S$58,000) a month to operate the hostel.
Some years after the Iron Curtain fell, North Korea, in a classic capitalist manoeuvre, leased the building. Its prime location in the centre of Berlin makes it popular with backpackers and students on field trips.
Mr Martin Schaefer, a spokesman for the Foreign Ministry, said the hostel would be closed to comply with stiffer sanctions passed last November by the United Nations that ban any commercial dealings with North Korean embassies or on their property.
The German authorities are acting as fast as they can within the law, Mr Schaefer added.
The rooms at the hostel range from singles and doubles to bunks for four or eight guests in a room, according to the hostel's website. Prices listed are as low as €17 a bed, rising to €59 for a single room.
Guests came and went at lunchtime on Wednesday. Three teenagers on a school trip were smoking in the courtyard, unaware of the North Korean connection. They, like other guests, did not seem perturbed when told about it.
A mural on the back wall of the reception area depicts a slice of Berlin's Cold War history. Jagged fragments of a structure litter the picture while a quiet sign off to the left announces: "Construction of the Wall, 1961. Wall falls, 1989."
North Korea has relatively few embassies in Europe, and many of them are holdovers from communist times. Its Berlin mission stands on Glinkastrasse, once a central thoroughfare in the government district of East Berlin.
A middle-aged woman emerged after a reporter rang the bell during office hours. In halting English, she said that diplomats in authority were not around.